OFWs demanding more auto loans

The overseas Filipino workers’ (OFWs) demand for auto loans is growing at an unprecedented rate. This in turn is grabbing the eyeballs of the banks which are keen on cashing in on this trend. Banks have seen a rise in demand for vans, Asian utility vehicles and sports utility vehicles. This is clearly evident in the statistics which show that about 22-23 per cent of new auto loans are being released by the Philippine National Bank.

 

Today the OFWs are no longer themselves to buying houses and housing appliances but also vehicles which are as good as any other asset. This is accounted to the fact that more OFWs are employed as highly skilled professionals in the developed countries which gives them the financial power to purchase more. Most of these OFWs take up an average loan of about P700,000 with a tenor of three years. These clients usually pay 20 per cent in upfront equity and amortise the rest.

 

It would not be easy to say whether this trend of buying cars and other vehicles is a good idea or not simply because it depends on a number of things like, the capacity to pay, benefits of getting a vehicle, costs of getting a car and other associated risks. In a nutshell, the OFWs should take into account all the features of risks involved before thinking of making an investment like this.

Philippine National Bank opts for APS for MasterCard launch in Europe

With the idea of providing international payment card and a better remittance tool, the Philippine National Bank has decided to promote the cashplus prepaid Gold MasterCard throughout its Europe network. This comes after statistics clearly show that the number of Filipinos living in the UK alone has gone up considerably. The weak Philippine economy is heavily dependent on the remittances sent by the overseas Filipino workers (OFWs). This has been realised by the government too which in 2002 appealed to its nationals living abroad to send money back home.

 

The cashplus prepaid is tipped as the cheaper mode of sending money to the Philippines. APS’s cashplus prepaid Gold MasterCard is readily available in the European market and is the most awarded prepaid payment card in Europe. It offers maximum card utility without the credit facility. Its features provide a cost effective and seamless remittance service which appeals to foreign citizens who can also experience card acceptance problems when paying with domestically issued payment cards which are not accepted widely offshore.

 

The PNB customers will benefit from this as they would get to share their money with family and friends on a regular basis. Since the service is expected to go online the subscribers would benefit even more. Additionally, the cashplus prepaid Gold MasteCard will also reduce exposure to fraud. It would eliminate the risk of losses caused by unauthorised borrowings.

 

The bank expects to see more activity with foreign banking partners this year as it sets out with a service model designed to be cost and operationally effective.

Mobile Financial Services: The next big thing

The boom in the mobile industry is expected to be a big hit by 2015. Experts feel the mobile communications and financial services by coming together are going to change the remittance business forever. Edgar Dunn, a specialist mobile banking and payments consultancy firm, in partnership with the GSMA, the global trade association for the mobile industry has come up with these predictions in its new study. It believes that by 2015 1.4 billion people could be using mobile wallets- software that enables consumers to manage their money. The GSMA has been focusing on two major initiatives- Mobile money transfer and Pay-Buy-Mobile focused transaction at point of sale.

 

The study has found that to implement the mobile wallet scheme in different parts of the world the governments must ensure that the regulations are relaxed and the transaction is made easy between the countries. Following an agreement with the GSMA, Western Union has reached agreements to deploy mobile money transfer services with Bharti Airtel in India and Globe and Smart in the Philippines.

 

Further, to take this initiative one step forward a Mobile Money Summit has been scheduled this May which is going to bring together the stakeholders required for industry and governments to create this new frontier in financial services and inclusion.

 

Metro Bank expands remittance service

In a move to expand its presence in the Middle East, the Metropolitan Bank & Trust Co. (MetroBank) has come to an agreement with a Saudi Arabian bank for a remittance service tie up. The partnership between the National Commercial Bank (NCB), the first bank established in Saudi Arabia and the Metro Bank is expected to increase the penetration of the Metro Bank in Saudi Arabia. According to the agreement, Metro Bank will be fulfilling the operations of NCB’s Philippine bound NCB QuickPay.

 

Metro Bank has a network of over 800 local and international branches, remittance offices and subsidiaries worldwide. In Saudi Arabia it has six partner banks that serve as its remittance offices. Saudi Arabia is one of the biggest sources of OFW remittances to the Philippines. The modes of payment under the agreement are credit to Metro bank accounts, cash pick-up transactions at Metro bank branches and door to door cash delivery.

 

Diaspora bonds to help Kenyan government

The Kenyan government has come up with a diaspora bond that will help it to increase the amount of remittances to the development projects and act as a source of cheap credit to the government. Considering the fact that a large amount of the remittances is spent on direct consumption and not on long term investments and savings, this move is expected to play a big role in the development of the country.

 

The World Bank in recent times has been promoting efforts like these to help the African countries to set up financial institutions. The bonds in Kenya are expected to be set up later in the year. The idea is to develop a financial instrument that would enable the Central Bank to use remittances as collateral bond issues and loan securitisation.

 

No other African country, except Ghana has issued a diaspora bond. The diaspora bonds are considered viable opportunity for repatriating Africa’s flight capital, estimated at more than $170 bn by the World Bank.

M-Remittance service launched between the UAE and the Philippines

Germany based company, Paybox and Abu Dhabi based Lari Exchange have launched payMAX, the first mobile remittance service from the Middle East to G Cash’s mobile wallet in the Philippines. This is seen as the beginning of a strategic partnership between Paybox Mobiliser Platform and Lari’s experience and network in Remittances to build a mobile remittance platform from the UAE. Middle East has a considerable population comprising of the overseas workers which makes it an ideal destination for such services.

 

The new service is currently available through web screens at the Lari Exchange outlets and is enabling the customers to send immediate cash back home to friends and family in the Philippines by depositing the money in any one of the Lari outlets. They can then request to remit the money in Dirham value to Globe Telecom customers in the Philippines, which will be converted into Filipino pesos and deposited into the beneficiaries’ G Cash wallet. Lari expects to expand its customer base through this move which would also bring in the profits subsequently. Other countries like Egypt and Saudi Arabia are also being targeted.

Land Bank now offering easy Padala remittance service

The Land Bank of the Philippines has come up with a new set of remittance services that would cater to the needs of the overseas Filipino workers (OFWs) living in countries like Italy, Japan, Singapore, Taiwan, UAE, Kuwait and the US. The service is going to help the OFWs to transfer funds from a local Land Bank account to a foreign currency LandBank account. Additionally, the users would also get two notable services, the iCheque and iWires that would allow them to issue checks and wire transfer through their online accounts.

 

The easy Padala service is a blessing for several million OFWs living away from home as they get to avail remittance services online and be assured that their money has reached their loved ones on time. This facility has made it quite easier for the OFWs to remit money and remain sure. The service is in initial stages and is expected to expand to other countries having OFW presence in the days to come.

Payroll System faces ire

The Overseas Filipino Workers (OFWs) organisations are criticising the proposal to bring back the Marcos era payroll system which compels an OFW to remit up to 70 per cent of his monthly salary through the banking channels. They are calling this system ‘dictatorial’ and unjustified. These organisations are instead demanding a ‘free remittance system’.

 

In the early 80s, President Ferdinand Marcos had signed the law Executive order 857 (Forced Remittance Law) which forced the migrant workers to remit 70 percent (for land based migrants) and 100 per cent (for sea based migrants) of their earnings through overseas employment. Non banking channels were strictly prohibited and as a result it faced widespread protests in the Middle East, Honk Kong, Japan and Europe.

 

Migrante feels the pay rolling system is a failure among the Arab employers who are not keen on spending more time to arrange for the remittance of an OFWs salary. Many also feel that the recruitment agencies could take advantage of such a situation. They feel the very fact that the proposal was made by a recruiter who earns a lot of money through the OFWs makes it clear that the OFWs’ interests would be put on hold for the benefit of the recruitment agencies.

More jobs for OFWs in Saudi Arabia

With the fears of economic stagnation coming true, this would surely bring a cheer for those who need to work in the Middle East and have been perturbed by the sudden change of events. The Department of Labor and Employment (DOLE) Secretary, Marianito Roque said that the number of OFWs in Saudi Arabia is set to reach 1.8 million before the end of 2008. This again has proved that the Middle East remains one of the top destinations for the Overseas Filipino Workers (OFWs). If this expectation turns true more than 300,000 skilled workers from the Philippines will be hired for working in the Kingdom of Saudi Arabia (KSA). This prediction has been stemmed by the fact around four super cities in Saudi Arabia will be constructed in the next five years which would require hiring more foreign workers. The project is expected to boost the weak economy and generate more employment opportunities for the OFWs.

 

In the recent past the situation in Saudi Arabia has not really been smooth. Several thousand OFWs were deported back home and reports of maltreatments, harassments and torture have been rampant. This evoked strong reaction from all quarters and the demand for the security of the OFWs has become quite intense.

Villar presses for repatriation

As the voices of protest and demands for repatriation get stronger, Senate President Manny Villar has also shown solidarity towards the Overseas Filipino Workers (OFWs) and is pushing for the establishment of a P1 billion fund to provide for early repatriation and adequate assistance to Filipinos in distress. Villar said that adequate measures should be taken to ensure the welfare of millions of OFWs who are living away from home. He said that the constitution, the Labor Code, the migrant workers act and several other executive orders are intended to safeguard the interests of the OFWs but despite this the OFWs continue to live in distress. He further added that the reports of maltreatments, harassments and abductions have swelled in the recent past and the Philippine embassies and consulates have been home to several such distressed OFWs. He made an important point when he said that the funding for repatriation and assistance are intended only for legal OFWs and not for all. He called out for a change in this to protect every OFW. Villar has filed Senate Bill 2231, that seeks to cover both documented and undocumented OFWs in the assistance program of the government. It also adds a special mechanism to reduce the plight of the OFWs by creating a P1 billion Special Fund which can be used for repatriation, medical expenses and migration fees for overstaying Filipinos. A welcome gesture for sure!